Free Markets, Free People

Ezra Klein


Ezra Klein’s Astonishing New Charts

Or at least they seem to have astonished Klein. Here’s one as an example:

doctorvisit-thumb-454x317
My goodness. As Klein says:

There is a simple explanation for why American health care costs so much more than health care in any other country: because we pay so much more for each unit of care.

Anyone – what’s missing from this rather simplistic explanation?

Cost.

What is the real cost of delivering the expected/desired/demanded health care during a doctor’s visit?  What is the cost per “unit delivered”.  And if it is higher, why is it higher?  Is it higher simply because we’re being gouged as is implied by Klein?  Or is more being delivered per unit and thus justifying the higher cost?  The chart tells us none of that.

What will these various countries pay for during a visit?  And given that, which country’s patients get the most (and best) care for the money?  Again, the chart tells us none of that.

As has been pointed out any number of times, when you remove non-health care related deaths from this country’s life expectancy statistics, we are in better shape than anyone.  In fact, when you get into the later years, survival rates among our elderly are unsurpassed by any system.  That to me would say that we must be delivering something during those visits that the mere “price” doesn’t reflect.

But all folks like Klein ever seem to want to talk about is “price”. This may comes as a surprise to some, but price is determined by cost and competition. It’s not an arbitrary number.  In fact, competition keeps both cost and price (and thus profit) at a reasonable level. That’s how a market works, even one as distorted by government intrusion as our health care system.

There’s also another 800 pound gorilla in the room. Actually the gorilla is the bar on the graph disguised as a $72 fee from Medicare. How  do you think the difference between those paltry fees and the real cost of the visit are recovered? Look left, young man, look left. That big bar of private insurance subsidizes Medicare by absorbing the cost shifting which goes on from Medicare payments which don’t cover cost. Without the ability to do that fewer and fewer doctors would accept or treat Medicare patients. In fact, why do you think they limit them now?  That reality, of course,  isn’t reflected at all in the chart.

Additionally, there is the quality of care – what does a $30 doctor’s visit buy in Canada or the UK in comparison with a $72 Medicare visit in the US? We really have no idea. So how then is such a comparison relevant to anything? I can buy a KIA or I can buy a BMW. Few would argue they have the same cost and certainly not the same value. The quality is entirely different. Yet they’re both cars.  The chart assumes all care is equal. But we know that isn’t true.

In fact, these sorts of apples and road apples comparisons aren’t useful for much more than gulling the masses when pushing an agenda.  Surely, common sense tells us, we can get more for less, right? Of course not.  Most people discover during their lifetime that you do indeed get what you pay for.  And in the field of health care, the differences can be vast.

In terms of a serious argument for government run health care in a free country, the astonishing charts leave a lot more unsaid than said.  Or put another way, they and the argument Klein tries to make with them aren’t worth the powder to blow them to hell.

~McQ


Whistling Past The Graveyard

Ezra Klein does what a lot on the left are doing since the Tea Party in DC – trying to pretend it doesn’t mean much. He does it by deciding the crowd was 30,000 to 50,000 (note to Klein, that’s acceptable only if you declare you’ve never looked at a single crowd picture from Saturday). At that size, it is fairly equal to the largest of the anti-war demonstrations. With that as his premise Klein trots this out:

Remember when the Iraq War protests stopped the Iraq War?

Yeah. Me neither. Nor, for that matter, does Fox News, or Rush Limbaugh, which leaves me a bit confused by their joyous reaction to the Tea Party that took place in Washington on Sunday. Estimates peg it somewhere between 30,000 and 50,000 people, which makes it an admirable bit of organizing, but not a contender for the protest hall of fame. What it seems, rather, is the progression of a broader societal trend: The advent of online organizing is making it easier to connect large numbers of like-minded people and ask them to attend a rally. It’s done that for politicians like Barack Obama, protesters of all sorts and stripes, and even flash mobs.

If this was a flash mob, it was the granddaddy of flash mobs. Obviously it wasn’t. In fact it appears that the correct crowd size is “several hundred thousands”. Speaking of estimates, I’m seeing more and more nonpartisan estimates at 400,000 to 500,000.

That’s one heck of a lot of people with no real leadership gathering to protest the size and scope of government. And that’s what elected officials should find disquieting about this gathering. Klein tries to imply this was a product of “online organizing”. But it doesn’t really seem to be the case. Certainly the date was thrown out there and there’s little doubt that emails flew among certain groups, but there was nothing, organizationally, which would even approach organizational attempts like ANSWER or others on the anti-war side used to get protesters together.

It was more like “if you’re in the area and you have a problem with what’s being done in DC, stop by”. And about a half million did (not to mention the thousands upon thousands that went to local event like those held in Ft. Worth, TX and Quincy, IL).

This should give politicians pause. If that many people can be convinced to leave their couches and head toward the nation’s capital, how many who couldn’t make the trip but agreed are out there?

But the politicos and many pundits seem bound and determined to ignore what happened. What happened Saturday happened specifically because the half million who did show up are tired of being ignored. If you listen to David Axlerod, though, they’re going to continue to be ignored. In fact, worse than being ignored, they’re being dismissed:

White House senior adviser David Axelrod told Schieffer about the taxpayer protests this weekend: “I don’t think it’s indicative of the nation’s mood. In fact, I don’t believe some of the angriest, … most strident voices we saw during the summer were representative of the thousands of town-hall meetings that went on around the country — that came off peacefully, that were constructive, people voicing their points of view. …

“But this is … one of the great things about our country, is that people can express themselves, even if they’re not representative of the majority. … I don’t think we ought to be distracted by that. My message to them is: They’re wrong.

The message to Axelrod and Klein and all others who plan to continue to ignore this movement as insignificant, unrepresentative and “wrong” is pretty clear. Their arrogance borders on that of Louis XVI of France. And if they continue pushing the agenda of bigger and more expensive government, their end will be similar – a complete loss of power.

They still don’t get it – this isn’t just about health care.

~McQ


Some Notes Before Obama’s Health Care Speech

The presidential speech before a joint session of Congress tonight is probably one of the more highly anticipated speeches in Obama’s young presidency. Some say it is a “make or break” speech, alluding to the fact that if it doesn’t hit the mark, it could doom health care legislation and his presidency.

We’ve heard from Robert Gibbs that Obama will draw some “lines in the sand”. We’ve been led to believe that Obama will get specific and essentially lay out the minimums he’ll accept for health care legislation. There’s debate as to whether the public option will be a demand or optional.

To this point, no one really knows. So I thought I’d throw a few thoughts out here for you to ponder.

One thing I hope to hear is the “purpose” of any reform. It began as a cry to insure the uninsured. It morphed into “health care reform”. And now, it is often called “health insurance reform”. If people seem confused about the purpose of the legislation, it’s because Democrats and the president have been unclear.

If it is about insuring the uninsured, that ought to be about a 50 page bill – the size of the Medicare bill when it was submitted to Congress years ago. Of course that’s not what this reform is about and the extent of what is being considered needs to be made crystal clear.

Another aspect of this is cost. Both the president and Congress have claimed that the reason this reform is necessary is the level of spending is rising such that it will bankrupt us in the future. They believe we must control costs.

Ezra Klein has a piece about the public option which makes a very important point cost control. There are only three ways to do that:

Cost control happens when we use less treatment, need less treatment, or pay less for treatment …

Anyone sharp enough to turn on a light switch should be able to understand what those three things promise. They should also understand that, used in combination, they mean more than “health insurance reform”. They mean a completely different way of treatment in which less costly treatments are encouraged, preventive medicine is encouraged and, regardless of the treatment given, less reimbursement for the care.

So when the president talks about cost controls tonight, that’s what he is talking about. The reality is, someone will have to be making those decisions about cost and treatment, and there’s no question the person doing so will not be you or your doctor. It should also be clear that the third leg of the cost control stool – less reimbursement for the care – does indeed require cuts in Medicare spending. Pretending otherwise is just an odious lie.

On a cultural level, Obama has to be convincing enough to sell the idea that government can handle this sort of change. That is a very tall order.

Paul Krugman, in a post about the public option said this about the politics of reform:

Let me add a sort of larger point: aside from the essentially circular political arguments — centrist Democrats insisting that the public option must be dropped to get the votes of centrist Democrats — the argument against the public option boils down to the fact that it’s bad because it is, horrors, a government program. And sooner or later Democrats have to take a stand against Reaganism — against the presumption that if the government does it, it’s bad.

The problem, of course, is there is nothing the Democrats have done to this point that makes any other case. Krugman needs only to think back to TARP, “stimulus”, GM takeover, financial institution bailout, even “cash for clunkers” have all been mostly ineffective or too intrusive or badly handled. While government certainly has some functions in which it can be effective, for the most part and for most of its history, when it goes outside those basic functions, it fails miserably.

This promises to be one of those failures and the public understands that. As many have pointed out, Medicare – a government health care insurance system run by government as a single-payer – has 58 trillion in future unfunded liabilities. If government can’t control costs in a program that is only part of the whole of the health care system, why should anyone believe it can competently run the whole thing?

Obviously, as polls show, they don’t. And a glib speech is not likely to convince them otherwise.

What Obama has to do tonight is reestablish what he’s been hemorrhaging for months – trust. The majority of people do not trust he or the Democrats on this particular issue. There are a number of reasons why that trust has slipped so badly. The primary reason, however, is neither he nor the Democrats have been able to substantiate the claims they’ve made about health care reform. In fact it has been a debacle for them. Few people who’ve looked into their claims have come away satisfied they can deliver.

So his major problem and his major task tonight is to rebuild that trust that has eroded so quickly. That’s a onerous task because usually, once trust is lost, it is very hard to regain. While what Mr. Obama presents tonight is important, nothing is more important than how he presents it.

If he can produce a clear vision with claims backed by reputable cites, studies and numbers, he might make a difference. But if he has simply repackaged the Democrat ideas to date and is counting on his rhetorical skills to make the case no one else has successfully made, he’s setting himself up for failure.

Additionally, the first time he uses one of the old and tired talking points he loves to throw out at town halls, such as keeping your doctor and your plan, those with whom he is trying to reestablish that critical link of trust will turn him off.

He also needs to avoid partisanship. If he goes after Republicans and claims they have brought nothing to the table, he’ll hurt his cause. Sarah Palin, of all people, laid out what Republicans have been saying for a while in a WSJ editorial today. Most people understand that it isn’t that Republicans haven’t put forward ideas, it is that Democrats have refused to consider them and basically shut them out of this process.

I’m looking forward to this speech for any number of reasons. But, given August, I’m not sure there are that many minds that are going to be swayed by his speech. Speaking of lines in the sand, I think among both the pubic and among legislators, they’re fairly well drawn.

Do I think something called “health care reform” will emerge at some point within the next few months? Yes, I do. Will it be what Obama talks about tonight and the Democrats want? Not necessarily. Not necessarily at all.

So let’s give a listen tonight and see how he does. I expect emotional appeals, moral appeals and financial appeals in the speech. But the question is will the speech have enough appeal to change the direction of the debate? Given the atmosphere in which he must make his appeal, my guess is “no”.

~McQ


Ezra Klein Awaits Obama’s “Forceful Entry” Into Health Care Debate

As Mickey Kaus points out, Ezra Klein is into some heavy self-delusion if he really believes this to be true:

Since he didn’t forcefully enter the debate, the media reported on his news conferences and town hall meetings as if they were the White House’s failed attempts to set the agenda. Obama’s popularity has fallen and support for “his” bill — a bill that doesn’t exist — has plummeted.

Objectively, the fact that he hasn’t given a speech on health-care reform or defined his own bill or begun to really pressure the Congress means, in practice, that he has a lot left of tools left in his toolbox.

If Obama hasn’t “forcefully entered the [health care] debate” what was that ABC infomercial? What was the purpose of the series of town halls – if he wasn’t “forcefully entering” the debate.

In fact, Obama has been trying to push his health care agenda since he’s been in office.

Kaus reminds us of how involved to this point Obama has been in the topic of health care:

“Our CBS News tally shows that Mr. Obama has given 27 speeches specifically on his health care objectives. Add in other remarks, events and statements in which he mentioned health care and the number soars to 119.”

Those numbers flatly contradict Klein’s conclusion:

What’s not clear is whether he has the political capital left to use them effectively, or whether the last few months saw him robbed of something he hadn’t even had a chance to use.

Never had a chance to use? Hardly. Misspent, misapplied, squandered? More likely – it isn’t that he hasn’t taken the opportunities to “forcefully enter” the health care debate, it’s that he’s been completely ineffective when he has.

That’s why many don’t buy the David Axelrod spin which says, in effect, that has all proceeded as planned and now they’re merely going to “synthesize and harmonize these strands and get this done” with Obama’s upcoming speech.

Klein may believe that Obama is finally “forcefully entering” the debate with the upcoming speech, but I’d bet most Americans will see it as simply more of the same old ineffective nonsense wrapped in a new rhetorically glittering package that they’ve been hearing for months.

~McQ


Paul Krugman – Climate Expert (UPDATE – Krugman Calls Skeptics “Traitors”)

Bumped to the top for obvious reasons.

Here’s a perfect example of why Paul Krugman should stick with writing about economics:

One of the favorite arguments of climate-change deniers is “but it was warmer in the late 90s.” In fact, the odds are good that I’ll get that argument from George Will on This Weak tomorrow. I basically know the answer: temperature is a noisy time series, so if you pick and choose your dates over a short time span you can usually make whatever case you want. That’s why you need to look at longer trends and do some statistical analysis. But I thought that it would be a good thing to look at the data myself.

So here’s the data he chose:

temptrend

Anyone know what happened prior to 1850?

A little thing called the “Little Ice Age”, remember? And before that? Yup, the Medieval Warm Period. So what did that look like?

2000_Year_Temperature_Comparison

So what are the two things you notice right away? Well, one is “cycles”. In fact, if you go back even further you’ll see the same sorts of cycles repeated through out our planet’s history. Looking at data from 1850 in the context of climate change history is to use an eyeblink of data for comparison (coming out of the depths of a centuries long planetary cold spell). It is a classic misuse of limited data in an attempt to support a point of view.  It certainly can’t be called “science”.

And secondly, our temperature now isn’t much different than in the 1000′s (not to mention there is much debate as to whether the temperature measurements of today are even accurate), with a very small population relative to today and with no industry, no burning of fossil fuel, and no worries about “green house gasses”. How in the world can that be?

Meteorologist Augie Auer said it best:

“It is time to attack the myth of global warming,” he said.

Water vapour was responsible for 95 per cent of the greenhouse effect, an effect which was vital to keep the world warm, he explained.

“If we didn’t have the greenhouse effect the planet would be at minus 18 deg C but because we do have the greenhouse effect it is plus 15 deg C, all the time.”

The other greenhouse gases: carbon dioxide, methane, nitrogen dioxide, and various others including CFCs, contributed only five per cent of the effect, carbon dioxide being by far the greatest contributor at 3.6 per cent.

However, carbon dioxide as a result of man’s activities was only 3.2 per cent of that, hence only 0.12 per cent of the greenhouse gases in total. Human-related methane, nitrogen dioxide and CFCs etc made similarly minuscule contributions to the effect: 0.066, 0.047, and 0.046 per cent respectively.

“That ought to be the end of the argument, there and then,” he said.

“We couldn’t do it (change the climate) even if we wanted to because water vapour dominates.”

Yet the Greens continued to use phrases such as “The planet is groaning under the weight of CO2” and Government policies were about to hit industries such as farming, he warned.

“The Greens are really going to go after you because you put out 49 per cent of the countries’ emissions. Does anybody ask 49 per cent of what? Does anybody know how small that number is?

“It’s become a witch-hunt; a Salem witch-hunt,” he said.

And Krugman seems to be trying out for head inquisitor. There are the numbers Mr. Krugman. Why not try crunching those instead of selectively picking the data that supports your point of view. You wouldn’t stand for that in the economic world. Why should we put up with it from you when you talk about science?

UPDATE: Yeah, no inflammatory language here:

And as I watched the deniers make their arguments, I couldn’t help thinking that I was watching a form of treason — treason against the planet.

Quite an argument, isn’t it – “disagree with me and the “consensus” and you’re committing “treason against the planet?”

You have to wonder, would disagreeing over economic policy be “treason against the economy” in Krugman’s wacky world?  How desperate are you when you have to resort to name calling like “traitor” over a policy dispute?

UPDATE II: Irony alert Ezra Klein referring to the Krugman chart above which begins at the end of the period known as the “Little Ice Age”:

Paul Krugman has a nice response to the variant of global warming denialism favored by the statistically illiterate.

Who is “statistically illiterate” here, Mr. Klein?

~McQ


Questions and Observations #2

For new readers the title is that for which the shortened “QandO” stands. This is the second in a series of questions and observations.

  • In the “you can’t make this up” department, China will block the sale of Hummer for “environmental concerns”.  I guess that’s their nod to the rest of the world after flatly refusing cut CO2 emissions in the future.
  • Ezra Klein is suddenly for smaller government, specifically the elimination of the Agriculture Committee. Of course the only reason he’d like to see it given the deep 6 is because it has, in Klein’s opinion, badly weakened cap-and-trade by extracting “a truly mind-boggling array of tax breaks, exemptions, and straight subsidies”. I guess Klein would like to temporarily make government smaller to make it larger.
  • Yes, Michael Jackson is dead – but for heaven sake, do we have to devote every minute of the news day to running “Thriller” vid and spreading rumors about the possible cause of his death? Is this what “news” organizations have become?
  • Apparently we’re still stalking the North Korean ship enroute to either Singapore or Burma. For those who are waiting for us to confront it and board it, that’s not going to happen. The “tough” UN resolution only provides for boarding if the North Koreans agree. And, while we can demand that they then go to the nearest port for inspection, the North Koreans can refuse that as well. The plan, it seems, is to convince the refueling port the NoKos pull into to refuse to refuel the ship. Then, when the NoKo ship runs out of fuel, put it under tow and then inspect it. As I understand it – they can then inspect it legitimately. Amazing.
  • Waxman-Markey, aka cap-and-trade, survived an earlier test vote that moved the bill to the floor for a 5pm vote. As I recall the margin was 5 votes. It is a job destroyer in the middle of a recession. The Center for Data Analysis of the Heritage Foundation figures it will cost 50,000 jobs in the transportation equipment sector alone. Their data for other sectors is available here.
  • House liberals have staked out a bit of ground on the health care bill saying they will not vote for it if it doesn’t include a public option – period. That is actually good news as the public option does seem to be in trouble. Any bill showing up without it will most likely not get the 80 members of the Congressional Progressive Caucus to vote for it. Add in the Republicans and the Blue Dogs, and it may be in very serious trouble without just the sticker shock of 1 to 3 trillion dollars of cost.
  • Mark Sanford? He should resign. The affair is between he and his family. He should resign because he was derelict in his duty and he misappropriated government funds to pay for his trip to Argentina.  Kinda like Bill Clinton should have resigned, not for the affair, but for lying under oath to a grand jury and attempting to obstruct justice.

~McQ


Government Health Care – A Cautionary Tale

Dale and I once interviewed Ezra Klein about health care on our podcast. Klein held the VA system up as a shining example of good government health care. Of course that was before the shameful condition of Walter Reed had been discovered. Since then other problems (for instance, contaminated colonoscopy equipment in various locations) have been discovered.

A commenter once asked “if VA is good enough for our veterans, why isn’t it good enough for us.” My answer was “it isn’t good enough for our veterans, it is instead what they’re stuck with.”

Today brings another example of the problems this sort of medicine is bound to have. It is a bureaucratic nightmare, even at the relatively small size of VA.

For patients with prostate cancer, it is a common surgical procedure: a doctor implants dozens of radioactive seeds to attack the disease. But when Dr. Gary D. Kao treated one patient at the veterans’ hospital in Philadelphia, his aim was more than a little off.

Most of the seeds, 40 in all, landed in the patient’s healthy bladder, not the prostate.

It was a serious mistake, and under federal rules, regulators investigated. But Dr. Kao, with their consent, made his mistake all but disappear.

He simply rewrote his surgical plan to match the number of seeds in the prostate, investigators said.

The revision may have made Dr. Kao look better, but it did nothing for the patient, who had to undergo a second implant. It failed, too, resulting in an unintended dose to the rectum. Regulators knew nothing of this second mistake because no one reported it.

That as they say, was the tip of the iceberg. No one reported the problem because there was no peer review. And, this was one of many mistakes made by this doctor that apparently no one knew about:

Had the government responded more aggressively, it might have uncovered a rogue cancer unit at the hospital, one that operated with virtually no outside scrutiny and botched 92 of 116 cancer treatments over a span of more than six years — and then kept quiet about it, according to interviews with investigators, government officials and public records.

The team continued implants for a year even though the equipment that measured whether patients received the proper radiation dose was broken. The radiation safety committee at the Veterans Affairs hospital knew of this problem but took no action, records show.

Six years and no one had a clue. In fact, if you read the article in full, as you should, you’ll see that the discovery of this was essentially an accident.

This is government health care. This is what our vets are stuck with. This is not something we, as a society, should want any part of.

~McQ


Health Care – “The Public Plan”

Ezra Klein discusses what has commonly become known as the “public plan” in the emerging “health care reform” legislation. Put simply it is “public insurance” which is supposed to compete with the private insurance industry and, as Paul Krugman claims, keep them “honest”.

Klein lays out the various flavors being floated out there concerning this option:

• The “Trigger” Plan: Olympia Snowe is pushing this compromise, as are some conservative Democrats. The basic idea is that the public plan would act as an invisible threat: It would be “triggered” into existence if the private insurance market was unable to offer, say, enough options in a particular region, or enough cost control. In addition, the public plan would only come into existence in this or that region, or this or that state. It would be effectively useless as an insurer. It could potentially have some competitive effect in that private insurers would still work to avoid its existence. Some have argued, however, that the conditions being mentioned in the “trigger” proposals have already been met.

• The Weak Public Plan: This is what people are talking about when they refer to a “level-playing field.” This incarnation of the public plan — first proposed by Len Nichols at the New America Foundation and later echoed by Peter Harbage and Karen Davenport at the Center for American Progress — would have no special advantages over private insurers. It couldn’t use the low rates that Medicare sets or access taxpayer subsidies. It couldn’t force its way into networks. It would simply be another insurer, albeit with different incentives than traditional insurers.

• The Strong Public Plan: This would be like Medicare for the rest of us. It could throw the federal government’s weight around. It could negotiate deep discounts with providers. It could muscle its way into networks. Outside groups like the Commonwealth Fund estimate that it would save the average consumer 20 percent to 30 percent. That would give it a massive competitive advantage over private insurers, and would probably result in tens of millions of Americans dropping their current coverage and entering the public plan to save money. A variant of this was in the draft of Ted Kennedy’s bill that was leaked last week.

While Blue Dog Democrats have come out in favor of the “trigger” option, liberals such as Klein and Krugman prefer the “Strong Public Plan” for the reasons stated (massive dropping of private insurance for “public” (i.e. government) insurance). And there’s a reason they both prefer that – they see it as a backdoor way to move health insurance to a single payer system.

And that is a distinct possibility with both the “strong public plan”. In fact it is a design feature. The “competition” touted would most likely be in name only as Greg Mankiw explains (quoting Krugman to set up his explanation):

What’s still not settled, however, is whether regulation will be supplemented by competition, in the form of a public plan that Americans can buy into as an alternative to private insurance.Now nobody is proposing that Americans be forced to get their insurance from the government. The “public option,” if it materializes, will be just that — an option Americans can choose. And the reason for providing this option was clearly laid out in Mr. Obama’s letter: It will give Americans “a better range of choices, make the health care market more competitive, and keep the insurance companies honest.”

It seems to me that this passage, like most discussion of the issue, leaves out the answer to the key question: Would the public plan have access to taxpayer funds unavailable to private plans?

If the answer is yes, then the public plan would not offer honest competition to private plans. The taxpayer subsidies would tilt the playing field in favor of the public plan. In this case, the whole idea of a public option seems to be a disingenuous route toward a single-payer system, which many on the left favor but recognize is a political nonstarter.

If the answer is no, then the public plan would need to stand on its own financially and, in essence, would be a private nonprofit plan. But then what’s the point? If advocates of a public plan want to start a nonprofit company offering health insurance on better terms than existing insurance companies, nothing is stopping them from doing so right now. There is free entry into the market for health insurance. If a public plan without taxpayer support would succeed, so would a nonprofit insurance company. The fundamental viability of the enterprise does not depend on whether the employees are called “nonprofit administrators” or “civil servants.”

The bottom line: If the goal is honest competition in the provision of health insurance, the public option cannot do much good but can potentially do much harm.

That is a critical point in this debate – there isn’t an insurer out there that has as deep pockets as the US Treasury. If there is public money backing the public option, then the talk of “competition” is a sham. It is being used to placate and fool those who oppose a government takeover of insurance, the result which would surely happen if what Mankiw’s concerns are true. And if you follow the reasoning process that Mankiw has laid out above, it should be pretty darn obvious what the intent of this “public plan” really is, all the happy talk Klein and Krugman throw out there notwithstanding.

Last, but not least, while the “strong public plan” is an obvious short-cut to single-payer government run health care, the other two plans simply delay that same eventual outcome for a while. While there are certainly reforms that could be made in the insurance industry and health care generally, anyone who believes that government can do it a) better and b) more efficiently has simply not been paying attention to the shape government finances are in right now or how large the deficit has grown as it has mismanaged its entitlement empire to this point.

~McQ


“Health Care Reform” Update (Updated)

A few new developments, none of them good.

One – Obama has indicated his willingness to entertain legislation that would tax your private health care benefits. What that means is you’ll be taxed on the money your employer spends on your health care insurance. Of course the obvious immediate effect would be to raise revenue to pay for the public portion of his health care plan.

Two – Obama has decided that making insurance mandatory may not be such a bad idea. This is 180 degree change from candidate Obama who attempted to hide his statist tendencies by pretending that he wouldn’t require mandatory insurance for Americans.

Threein a letter to Democratic senators:

He told Democratic Sens. Edward Kennedy (Mass.) and Max Baucus (Mont.) that their legislation must include a government-run insurance option that would compete against the private sector. He also reaffirmed his support for a Massachusetts-style insurance exchange.

What do you suppose will happen if government-run insurance is an option for all? Depending on how it is structured (if, for instance, if it is a universal pool), we could see massive dumping of private insurance by businesses pointing their employees to the government option.

Four:

[I]mbuing a federal panel with the power to make Medicare payment recommendations that Congress must either accept or reject in their entirety.

Obama likens this proposal, based on the current Medicare Payment Advisory Commission, to the way military base closure decisions are made. To Republicans, however, the notion smacks of the kind of “rationing” dictated by government-run healthcare programs in Europe and Canada.

Ezra Klein explains the “federal panel’s” proposed role:

The health system changes too quickly for Congress to address through massive, infrequent, efforts at total reform. New technologies and new care structures create new problems. A health care reform package signed in 2009 might miss some real deficiencies, or real opportunities, that present themselves in 2012. A health reform process that recognizes that fact is a health reform process that is continual, rather than episodic.

But the reason health reform is so infrequent is that it’s structurally difficult. Small tweaks are too technically complex for Congress to easily conduct and so are dominated by lobbyists. Large reforms attract broad interest but are impeded by polarization and the threat of the filibuster. The MedPAC changes under discussion are, in other words, nothing less than a new process for health care cost reforms. They empower experts who won’t be intimidated by the intricacy of the issues and sidestep the filibuster’s ability to halt change in its tracks.

In other words health care decisions that will directly effect you will be in the hands of an unelected and unaccountable panel of bureaucrats just as all the critics of this sort have program have been claiming since the beginning of the debate.

The effect?

MedPAC, of course, is restricted to Medicare. But there’s little doubt that where Medicare leads, the health care industry follows. Private insurers frequently set their prices in relation to Medicare’s payment rates. Hospitals are sufficiently dependent on Medicare that a reform instituted by the entitlement program becomes a de facto change for the whole institution, and thus all patients. A process that empowers Medicare to aggressively and fluidly reform itself would end up dramatically changing the face of American health care in general.

Klein is exactly right, but most likely not for the reasons he thinks he is. The level of care, innovation and incentive will follow the decline in prices driven by MedPAC. What the nation needs is insurance reform, not “health care reform”. And while that is how the proponents of this try to spin the issue as just that, MedPAC’s existence and proposed expanded role argues persuasively against that spin.

Watch carefully – the Democrats are going to try to move this quickly and with little debate.

UPDATE: Apparently the letter from Obama I spoke about above also had another effect:

President Obama’s letter to Senate lawmakers yesterday saying a healthcare package must include a public option may have stalled progress on a bipartisan deal, Sen. Judd Gregg (R-N.H.) said Thursday.

Gregg said that the president’s letter, which said a public option should be included in the legislation, stalled “significant progress” in negotiations.

“We were making great progress up until yesterday, in my opinion,” Gregg said during an interview on CNBC. “There’s a working group under Sen. Baucus that involves senior Republican and Senate senior members who are involved in the healthcare debate, and we were, I thought, making some fairly significant progress.”

The most discouraging thing about this update is the fact that Republicans, who are claiming government is too big and we’re spending too much are knee deep in negotiating more government and more spending (i.e. selling out – again) having apparently swallowed the Democratic premise that this is necessary whole.

~McQ